House Prices Will Fall By Around 5% In 2023

12 Dec 2022 | Blog

2022 draws to a close at a time of both optimism and uncertainty. If only a year ago the evolution of the coronavirus pandemic was the main protagonist for the economic, social, and healthcare scenes, nowadays it is the war in Ukraine and global inflation that are the major destabilising elements to be taken into account. Even though the pandemic is under control and reduced to increasingly isolated and less serious cases, the rising cost of living, raw materials, and energy is a threat to countries’ economies and thus property markets.

With just a few weeks to go until the end of the financial year, Tecnotramit is pleased to announce its forecasts for 2023. One of the leading service companies for financial institutions and property companies in Spain and Portugal. It has a network of 34 offices throughout the Peninsula; headquarters in Barcelona, Madrid, and Lisbon, and a team of 1,200 people.

Vicenç Hernández Reche, CEO of the company, assures that, although ‘records of the macro indicators of the property sector continue to show a stable behaviour that confirms the resilient nature of the Spanish housing market,’ there will be ‘a certain general slowdown in the sector’ during 2023.

Data do not yet reflect it, but in the upcoming months there will be a logical decline in interest when buying homes in Spain due to the high property activity of recent years and the rise in the cost of living and mortgage financing. This will cause prices to fall by around 5% next year and the number of transactions by 10%. Far from being a negative forecast, this is good news for the industry, as the fall in prices oxygenates the market and prevents another housing bubble in the future,’ the expert stresses.

And, as the economist and doctor in Economic Psychology warns, had the gradual rise in prices that has been occurring in recent years continued, even with the pandemic in the middle, a housing ‘bubble’ scenario could have occurred in 2024 if no measures had been taken regarding European monetary policy. Thus, Tecnotramit makes a positive balance of 2022, ‘a year that has been a turning point due to the outbreak of war and the drastic increase in inflation‘.